Move Would Weaken New York’s Participation in Landmark, Cost-Effective Energy Plan for Northeast

ALBANY (March 6, 2009) – Caving to pressure from the energy industry, Governor Paterson has decided to reconsider the rules that New York adopted in order to participate in a landmark initiative with nine other Northeastern states to build a clean energy economy and cap global warming pollution from power plants.

The governor’s move goes against the state Department of Conservation’s decision to participate in the Regional Greenhouse Gas Initiative (RGGI), which reduces consumer energy costs and pollution at the same time. Under the current rule, RGGI is projected to lower energy costs for customers by more than $100 per year, while reducing carbon dioxide pollution to a level 10 percent below current emissions by 2019 and rewarding smart companies that outperform new pollution limits.

Below is a statement from Luis Martinez, energy attorney with the Natural Resources Defense Council (NRDC):

“At a moment when President Obama has committed to setting America on the path to a clean energy economy, Governor Paterson is on the cusp of undercutting New York’s clean energy progress. Reopening the rule for the Regional Greenhouse Gas Initiative to give power plant owners another bite at the apple is not only unnecessary to address their concerns, it takes us in the wrong direction. Governor Paterson should be fulfilling the needs of consumers, not making deals with industry behind closed doors.

“RGGI is good for consumers, good for the economy and good for our climate. The Northeast took a bold step forward for our clean energy future and the fight against global warming by signing on to RGGI – and there is no reason for the governor to move New Yorkers backward. America needs and deserves affordable, clean energy – Governor Paterson must get New York back on track.”

Background

RGGI is the first mandatory cap and trade energy system for global warming pollution ever implemented in the U.S., and the first time in the world this kind of system has put allowances up for sale, rather than distributing them for free. It creates a pollution trading market that sets new limits on the amount of global warming pollution power plants can emit. Plants will need to hold permits for every ton of pollution; those that find low cost ways to reduce emissions will need to purchase fewer permits, or allowances, and can sell any unused allowances to less-efficient plants that need them.

The structure gives power plant owners a financial incentive to reduce pollution and will encourage the development of cleaner sources of energy. Almost all of the revenue generated by the auction of allowances will be directed to state energy efficiency programs, thereby further developing a cleaner power sector and lowering energy bills for residential, commercial and industrial energy consumers.

Auctions are held on a quarterly basis, and the first launched in September 2008. A total of 14 auctions will take place before the end of the first three-year compliance period. Ten Northeastern states signed on to participate in RGGI: Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

RGGI sets an example for the federal government to establish an energy efficiency plan for the entire country, and similar multi-state climate pacts are in development among western states and Midwestern states. California is on the cusp of creating an economy-wide pollution reduction plan. RGGI also offers companies in the participating states a competitive edge as the federal government pollution limits take shape. Leading companies operating in the region that have backed the new system include Bank of America, Staples, National Grid, Pfizer, PSEG and the association of large energy users called The Energy Consortium.

The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 2 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world's natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing. Visit us at www.nrdc.org and follow us on Twitter @NRDC.